Here’s a clear breakdown of the main factors causing unemployment in Nepal:
📚 1. Skills Mismatch
- Many young people study fields with few job openings (e.g., general management, arts) while industries like IT, agriculture, and skilled trades have shortages.
- Lack of technical and vocational education means graduates are educated but unemployable.
🛑 2. Limited Industrialization
- Nepal’s economy is still heavily agriculture-based (~60% of people work in it) but agriculture doesn’t produce enough income or formal jobs.
- Manufacturing and industries haven’t grown fast enough to absorb the labor force.
🏛️ 3. Political Instability
- Frequent government changes (Nepal has had 5 Prime Ministers in 5 years recently) make investors hesitant.
- Without stable policies, both domestic and foreign businesses are slow to create jobs.
✈️ 4. Labor Migration
- Every year, hundreds of thousands of youths leave for Gulf countries, Malaysia, and Korea because of lack of opportunities at home.
- This creates a “brain drain” — the skilled, ambitious workers leave.
💸 5. Poor Investment Climate
- Complicated bureaucracy, corruption, poor infrastructure, and unreliable electricity scare away businesses.
- Without strong private sector growth, job creation remains slow.
📉 6. Slow Economic Diversification
- Nepal still depends heavily on tourism, remittances, and a few agricultural products.
- Sectors like IT, manufacturing, hydropower, and agro-processing are underdeveloped.
🧓 7. Demographic Pressure
- Nepal has a young population — about 40% are under 24.
- The economy isn’t growing fast enough to provide jobs for the huge number of young people entering the workforce every year.
🚧 8. Inadequate Infrastructure
- Lack of good transportation, logistics, energy, and digital infrastructure limits industrial and business expansion outside Kathmandu and a few major cities.
In short: Nepal’s unemployment problem is a mix of education gaps, slow private sector growth, migration trends, and weak governance.